KENANGA ANNUAL REPORT 2019

106 DIRECTORS’ REPORT INVESTMENT BANKING Investment Banking registered a higher PBT of RM24.7 million in FYE19 (FYE18: PBT of RM22.5 million) mainly due to higher interest income, trading and investment income and advisory fees income but partially negated by lower placement fees and fees on loans recorded for FYE19. INVESTMENT AND WEALTH MANAGEMENT Investment and Wealth Management registered a PBT of RM5.2 million (FYE18: PBT of RM33,000) mainly due to increase in Asset Under Management and higher management and performance fee earned. FUTURES The futures segment recorded higher LBT of RM2.9 million in FYE19 compared to LBT of RM2.8 million in FYE18 mainly due to lower commission income and interest income earned during the year. Income decreased mainly due to lower levels of client activities amid sluggish market conditions. MONEY LENDING AND FINANCING This segment reported a PBT of RM0.8 million in FYE19 compared to PBT of RM0.5 million in FYE18 mainly due to higher interest and profit income recorded during the current year. CAPITAL RATIOS The Group and the Bank remain on a strong financial footing with total capital ratios of 23.184% (FYE18: 25.257%) and 22.725% (FYE18: 23.869%) respectively, well above the minimum prescribed by Bank Negara Malaysia (“BNM”) of 10.5% including capital conservation buffer of up to 2.50%. OUTLOOK AND PROSPECTS FOR 2020 Our research indicates that external demand is expected to remain weak in the immediate term, dragged down by the escalating COVID-19 outbreak and the global oil price war, thus weighing on Malaysia’s Gross Domestic Product (“GDP”) growth in 2020. This is mainly attributable to the potential economic fallout in the services sector where transportation and tourism related industries will be amongst the most substantially affected. Whilst the full implications and impact of COVID-19 on the economy is not fully understood at this time, it is highly likely that there will be a significant and adverse impact on the overall GDP in 2020. Nevertheless, KIBB will proactively manage its risks such as liquidity, credit and market risks to mitigate the impact of slowdown in the economy resulting from the COVID-19 outbreak. We expect the year to be volatile and challenging but will continue to focus on our strategic objectives of achieving long term sustainable growth across the Group whilst ensuring our core businesses remain resilient.